The U.S. Supreme Court on Monday agreed to hear a dispute over
a federal funding policy that tribes say is costing them
hundreds of millions of dollars.

Lawsuits over contract support costs have been brought by a handful of tribes
but the issue affects all of Indian Country. This year alone, tribes who manage federal
programs will run up against a $142 million shortfall, according to estimates
from the National Congress of American Indians.

"If the U.S. has a contractual relationship with anybody out
there in the U.S., it honors those contracts,"
Ron Allen, the treasurer of NCAI and chairman of the Jamestown S'Klallam Tribe of
Washington, said last month. "Today, the U.S. is not honoring the full contracts that it
has with existing tribes."

Over the last 30 years, tribes have taken over programs previously managed by the
Bureau of Indian Affairs and the Indian Health Service.
But tribes have long questioned whether
they are receiving enough support funds to effectively carry out
the programs.

In a case brought by the Cherokee Nation of Oklahoma, the
Federal Circuit Court of Appeals ruled that the tribe is
owed full support costs for administering IHS
programs. The unanimous decision, issued by a three-judge panel in July 2003,
held the Department of Health and Human Services
liable for failing to pay.

The ruling conflicted with an earlier one from the 10th Circuit Court of
Appeals. A three-judge panel in November 2002 said
the Cherokee Nation and the
Duck Valley Shoshone-Paiute Tribe of Nevada will have to
live with the funding shortages.

In agreeing to resolve the dispute, the Supreme Court consolidated both cases.
The Bush administration at first opposed review of the 10th Circuit case but
changed its mind after losing in the Federal Circuit.

The dispute is rooted in the landmark Indian Self-Determination and
Education Assistance Act. The law, passed in 1975, authorizes
tribes to enter into contracts to manage BIA and IHS programs.

The law dictates that tribes
receive no less than the amount the government would have
spent on the programs. It also requires the government to provide tribes
with additional funds needed to carry out the contracts.

In briefs to the high court, the Department of Justice says the
federal agencies are at the mercy of Congress when doling out
the contract support costs. Government lawyers cite two
limits: the amount Congress appropriates for the contracts;
and a restriction on "reprogramming," or shifting
other funds, to cover any shortfalls.

"Those limits reflect the fact that self-determination agreements are not
government procurement contracts -- they are not purchases for the federal
government," one brief stated. "Instead, they are governmental funding arrangements under
which the tribes are substituted for a federal agency both in furnishing governmental
services and in receiving federal funding for that purpose."

The Federal Circuit ruled that this line of thought wasn't an
adequate defense for the Secretary of Health and Human Services,
who oversees the IHS.
"We cannot agree that the Secretary had discretion to refuse to reprogram to
meet his contractual obligations," wrote Judge Timothy B. Dyk.

The 10th Circuit, on the other hand, deferred to agency discretion, which
is based on the Congressional limits.
"This court finds the contracts at issue are conditioned on the IHS having
sufficient funding," wrote Judge Stephen H. Anderson.

Tribes have not had luck in pressing their views before the Supreme
Court. Since 2001, Indian interests have lost the overwhelming majority of cases
that reach the justices.

An avenue out of a potential negative decision is already being pursued
by tribal leaders. NCAI is urging members of Congress to amend existing law in
order to fund contracts fully.

"It is time to change the system for funding these government
contracts," NCAI president Tex Hall wrote in a November 7 letter
to the Senate Indian Affairs Committee and the House
Resources Committee.
"Indian tribes should no longer be treated as 'second class'
contractors."